market recovers rapidly after COVID-19 shutdown

"We've seen the other side of this"

“We’ve seen the other side of this”, says Israel Holby with Plantlogic, when asked about his thoughts on the effects of COVID-19 on the fresh produce market. The company makes containers for soft fruit production in substrate. The manufacturing of these materials is done in-house in China, and after the country was hit by the outbreak, they're seeing rapid recovery.

Strict measures“We know there’s life after this. If other countries can follow some of the strict measures we found at our China factory, and the cities there, it shouldn’t be catastrophic. For sure, there’s a major impact, but here in China we’re already seeing the other side”, says Israel Holby with Plantlogic. The company specializes in hydroponic pots & containers especially designed for vegetable and soft fruit production in substrates. Their main focus is the container, or pot, designed to help the grower have better management of his crop with increased uniformity, resulting in stronger yields. And their production is… in China. That means that the COVID-19 outbreak had a direct impact on their business.

Measures like not eating together and wearing masks were put in place right after Chinese New Year. The first objective for Plantlogic when dealing with the outbreak was the personal safety of colleagues, customers and their families. “And after that we need to fulfill the commitments we made to our customers in a safe way”. The pots that Plantlogic produces are sterile when they come off, hot, from the machines. The people who touch them now have to wash their hands more often, but they already wore gloves. Most of the handling is done by robots. “The biggest difference is that they have to wear masks now, to protect their coworkers and themselves. But the manufacturing site itself is very clean, and easy to keep clean as well. The limited human contact on the manufacturing side can be controlled.”

Market impactOf course, the crisis also impacts the market. There is some increase in shipping costs, and there was a bit of delay. Most of the pots are shipped by ocean container. When the amount of boats drops, the price adjusts. Israel: “But the shipping is not the biggest part of our costs.”

Normally, Plantlogic employees travel to the site when pots are delivered and to unload the container. Now, they can’t do that. That’s an inconvenience, but they are not going to stop production for that, it’s not impossible to deliver without the team on site. They help customers via videos and e-mail. For new product development, the team does have to go on site. “You need to get your hands on plants, that’s something you can’t do remotely.”

The crisis is also having an impact on the demand, customers are waiting to pull the trigger on projects. Yet there is a plus side to all of this, there is extra time to focus on R&D and operational projects - although the R&D projects are more difficult to set up and follow when not being able to visit the test farms.

Uplifting marketYet, people don’t stop eating vegetables or berries when they are quarantined. The planting of crops was delayed in China, since there were not enough workers. “But everything is returning back to normal.” On top of that, in China, the customers and markets have already bounced back. “There hasn’t been a big reduction in demand for food or berries there. If anything they start eating healthier. Nobody’s talking about rationing blueberries or about rationing tomatoes”, Israel adds. “There is still a hungry market that we need to feed! And our customers are not lobster companies, those can see a softening of the demand. But our customers produce very healthy products”. The delivery services are also working normally, although people don’t go out to eat much. “There is no evidence of consequences for food safety. In berries, safety standards are high already, harvest laborers must wash their hands constantly. The only difference in berry cultivation is also that they now have to wear masks.”

“We do need permits to travel”Israel says the industry can survive this crisis. For Plantlogic, in China everything is returning to normal. “When asked if we can deliver materials, if we can produce, we can say yes. Of course we’ve had some delays, but nothing we can’t recover from. Luckily, robots don’t get sick nor are quarantined, our factory is now 100% up and running”. But most important for him is to keep his team together - which is the biggest investment the company has made - and protecting this team.

“What we are learning from this situation? We are searching and finding strong communication channels that do not depend on physical presence. We have to make it work and that is an operational challenge. We have to trust our team.”